Morocco eyes $4bn loan from AfDB in 2013-16

Rabat (Morocco), May 9, 2013

Morocco expects to win $1 billion in loans per year from the African Development Bank (AfDB) over the next four years as the country looks to make full use of the bank's funds, the Moroccan Finance minister Nizar Baraka said.

Morocco is keen to develop its energy sources and infrastructure, but it logged a budget deficit of 2.2 per cent of gross domestic product in the first quarter and is trying to reform its costly system of food and energy subsidies.

Rabat has signed an agreement with the AfDB for a nominal loan package worth at least $650 million a year from 2012 to 2016.

But the minister, speaking at a press conference with the bank to announce that it will hold its annual assembly in Marrakesh at the end of May, said Morocco had received $1.2 billion last year and expected to get around $1 billion a year for the next four years.

The 2012 package of loans included $450 million for wind energy development, $220 million for solar power, $140 million for the agricultural sector and $200 million for rural electrification.

"Other countries' members don't mobilize the bank's funds, so we are trying to benefit most from the opportunities offered by the AfDB" Nizar Baraka added.

The AfDB said Morocco was its first client in a decade, which was why it chose Marrakesh to host its annual assembly.

The Tunisia-based bank added that it would start to move its offices back to its permanent headquarter in Abdijan in Ivory Cost after the annual assembly approves the move.

Nizar Baraka said that Morocco had also signed with the World Bank an agreement close to the amount in the AfDB deal, and that he expects to get more than $750 million a year from the World Bank.

Morocco also expects to sign a $2.4 billion loan deal in a few weeks with the Saudi-based Islamic Development Bank, sources have told Reuters.

The Moroccan economy grew 4.8 per cent in the first quarter from a year earlier, accelerating from the previous three months as agriculture recovered after bad weather. Its planning agency expects the economy to grow 5.5 per cent in 2013.

The cash-strapped country has said it wants to limit its public debt to 60 per cent of GDP despite its rising budget deficit.-Reuters